Coffee Market Report
The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund increase their net short position by 31.58% within this market over the week of trade leading up to Tuesday 26th September 2023; to register a new net short position at 21,527 Lots. The longer term in nature Index Fund sector of this market decrease their net long position by 8.13% within the market, to register a new net long position of 43,523 Lots on the day.
Over the same week, the Non-Commercial Speculative increased their net short position by 4.32% within the market over the week of trade leading to Tuesday 26th September 2023: to register a new net short position of 16,300 lots, which is the equivalent of 4,620,977 bags. This net short position has most likely been little changed following the period of mixed but overall sideways softer trade that has since followed.
The National Coffee Institute of Honduras (IHCAFE) have reported preliminary data shows that during the new October 2023 to September 2024 coffee year, the country is expected to export 4.98 million bags, or 6.60% lower than the previous coffee year, which has just concluded. IHCAFE have likewise reported that Honduras have exported 5.34 million bags during the full October 2022 to September 2023 coffee year.
The National Coffee Institute of Costa Rica (ICAFE) have reported that the country’s coffee exports for the month of September were 23,746 bags or 84.39% higher than the same month last year, at a total of 51,884 bags. This they say has contributed to the cumulative coffee exports for the full October 2022 to September 2023 coffee year to be 4.80% lower than the previous coffee year, at a total of 1,005,698 bags.
The Brazil government have reported preliminary data that illustrates the country’s green coffee exports for the month of September were 5.34% higher than the same month last year, at a total of 2.96 million bags. The official breakdown of coffee exports by description for September will soon be released and can be anticipated to illustrate this figure more accurately.
The Certified washed Arabica coffee stocks held against the New York exchange were seen to remain unchanged yesterday, to register these stocks at 441,945 bags, with 98.37% of these certified stocks being held in, Europe at a total of 434,760 bags and the remaining 1.63% being held in the USA at a total 7,185 Bags. Of this, a total 131,479 bags, or 29.75% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 64.99% of these certified coffees, originating from Honduras. There was meanwhile no change to the number of bags pending grading to the exchange; to register 0 bags pending grading on the day.
The November 2023 to December 2023 contract arbitrage between the London and New York markets widened yesterday to register this at 37.47 usc/Lb. This equates to 25.13% price discount for the London Robusta coffee.
It was a softer day on the commodity markets yesterday, as the US Dollar strengthened by 0.6% against a basket of other currencies. A stronger US Dollar is seen to be a bearish factor for commodities traded in other currencies. The New York Coffee, Cocoa, Corn and Soybean markets ended the day on firmer note, while the London Robusta Coffee, Sugar, Wheat, Gold, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.206 Sterling, at 1.046 the Euro and with the US Dollar buying 5.063 Brazil Real.
The New York and London markets started the day yesterday, carrying through pressure from the close on Friday to trade marginally to the south of par on softer notes respectively, both markets continued to oscillate to either side of par during the early morning session. The late morning session saw the New York market gain momentum as support was driven by buying in the market, while the London market continued to oscillate to the upside of par. As the afternoon progressed the markets gained support to recover from the early modest lows of the morning and trend firmer, the New York market buoyed by support in the market continued on a firmer trajectory before being capped late in the day to limit the day’s gains, this saw the market settle on a firmer note at the close, while the London market dropped back from the midafternoon highs to trend back towards par and to see the market settle on a modest near to unchanged softer note at the close. The day in the markets may be muted with the influential coffee trading hub and consumption country Germany, off the field of play today, as the country observes Reunification Day Public Holiday.
The London market ended the day on a modest near to unchanged negative note with 12.50% of the earlier losses of the day intact, while the New York market ended the day on a positive note with 56.19% of the earlier gains of the day intact. This mixed close for the markets, with the London market recovering all of the earlier losses to settle near to unchanged for the day and the New York market gaining momentum during the session might inspire some degree of follow through support to possibly see the markets set for a steady start to early trade today, against the prices set yesterday, as follows:
LONDON ROBUSTA US$/MT NEW YORK USC/LB.
NOV 2461 – 1 DEC 149.10 + 2.95
JAN 2374 + 5 MAR 150.10 + 2.90
MAR 2315 + 3 MAY 150.85 + 2.90
MAY 2283 + 1 JUL 151.70 + 2.80
JUL 2267 – 3 SEP 152.35 + 2.75
SEP 2249 – 7 DEC 153.25 + 2.80
NOV 2234 – 11 MAR 154.50 + 2.95
JAN 2219 – 15 MAY 155.60 + 3.00
